Correlation Between Jfrog and Atlassian Corp
Can any of the company-specific risk be diversified away by investing in both Jfrog and Atlassian Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jfrog and Atlassian Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jfrog and Atlassian Corp Plc, you can compare the effects of market volatilities on Jfrog and Atlassian Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jfrog with a short position of Atlassian Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jfrog and Atlassian Corp.
Diversification Opportunities for Jfrog and Atlassian Corp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jfrog and Atlassian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Atlassian Corp Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlassian Corp Plc and Jfrog is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jfrog are associated (or correlated) with Atlassian Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlassian Corp Plc has no effect on the direction of Jfrog i.e., Jfrog and Atlassian Corp go up and down completely randomly.
Pair Corralation between Jfrog and Atlassian Corp
Given the investment horizon of 90 days Jfrog is expected to generate 5.76 times less return on investment than Atlassian Corp. But when comparing it to its historical volatility, Jfrog is 1.36 times less risky than Atlassian Corp. It trades about 0.08 of its potential returns per unit of risk. Atlassian Corp Plc is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 15,881 in Atlassian Corp Plc on August 30, 2024 and sell it today you would earn a total of 10,365 from holding Atlassian Corp Plc or generate 65.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Jfrog vs. Atlassian Corp Plc
Performance |
| Timeline |
| Jfrog |
| Atlassian Corp Plc |
Jfrog and Atlassian Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jfrog and Atlassian Corp
The main advantage of trading using opposite Jfrog and Atlassian Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jfrog position performs unexpectedly, Atlassian Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Atlassian Corp will offset losses from the drop in Atlassian Corp's long position.The idea behind Jfrog and Atlassian Corp Plc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Atlassian Corp vs. Workday | Atlassian Corp vs. Salesforce | Atlassian Corp vs. Intuit Inc | Atlassian Corp vs. Snowflake |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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